When you are ready to consider selling your business, one of the top considerations is your asking price. Once you have a fair price established, you should be able to back up that price with details concerning why it’s justified. Let’s take a look at how merger and acquisition advisors work with their clients to help them do that.
Telling the Story
A key aspect of defending your asking price is telling the story of your business. Your M&A professional will help you go over the details of the story so it is properly conveyed to prospective buyers. Buyers, of course, will want to understand the story behind the business so that they can understand its history and why it is for sale. You will want to feel prepared to interact with prospective buyers and discuss details concerning the business value.
Your M&A advisor will put together written materials about your business. These also help buyers gain clarity on the story of your business and its sales message.
Is your business exit ready?
If you’re planning to exit your company in the near future, you may find EastWind’s Exit Strategy Playbook helpful in developing your own exit strategy, making your company more sellable.
Seeing Your Buyer’s Perspective
A major objective in developing the asking price for your business is that you want something that sounds not only reasonable but also attractive to buyers. We recommend trying to view the entire transaction from the buyer’s perspective. The buyer must be able to see how they will successfully own and potentially operate the business, as this is essential for fostering a completed deal.
Another consideration is how the buyer will pay for the business. In many cases, it can tremendously benefit a transaction to offer assistance in the way of seller financing. Seller financing can speed up the process, as you will not be so reliant waiting for the bank loan process, which can drag out for months.
The Complexities of Your Asking Price
The process of establishing and then justifying your asking price is not always simple. It is a symphony of moving parts, and it’s important to feel educated and involved in the process. Ultimately justifying the asking price is the launching point of the process, but it is also just the beginning of the journey towards the completion of a successful deal.